The team had our weekly internal strategy session this morning where we go over things we're seeing in the markets. What's moving? What's not? Where is there hidden risk? What's the market missing or not pricing in?

One of the things I brought up is: "Is anyone paying attention to this breakout in Apple?" I hadn't seen or heard much chatter about it and it seems to me few are aware this is happening or thinking through the implications of what this might mean for the broader indexes.

The team did highlight the move in our recent Monthly Conference call, so it's not happening in a vacuum. But it feels that outside our walls, few are paying attention.

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

Last night we held our August Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!

From the desk of Willie Delwiche.

Key Takeaways:

• Inflation narratives, not inflation itself, proving to be transitory 
• Economic rebound and higher inflation sapping financial liquidity
• Stocks (and bonds) usually struggle when inflation surges

With inflation, first it shocks you then it sneaks up on you. That is the way it has played out in 2021. This Spring, when the yearly inflation numbers started to heat up, newspapers ran banner headlines announcing the news and inflation-related Google searches exploded. In the months since, inflation has moved out of the headlines and searches related to it have fallen. What has shown little sign of letting up is inflation itself. 

In the latest round of inflation report (for data through July) there was some easing in some niche inflation components (e.g. used car prices) but the overall trend remains higher. The three-month change in the median CPI, which by definition is not influenced by outliers on either end of the distribution, has risen to its highest level in over...

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

The US Dollar Index $DXY has been our main focus as it nears the upper boundary of its recent range.

Where the USD heads next will have wide-ranging implications across asset classes by either providing a tailwind for risk assets or a headwind in the case it resolves higher from its year-to-date range.

But, as the market continues to chop sideways, we want to direct our attention to one of the most important risk gauges in the currency market.

That’s the Aussie-Yen.

In this week’s post, let’s check in on the AUD/JPY to see what information we can glean regarding risk appetite and what it could mean for other markets.

Let’s dive in.

First, we have a daily chart of the AUD/JPY:

Two key elements stand out on the daily chart. First, there’s the recent distribution phase, which we can see in the shape of a frowny face. This topping pattern resolved...

If there's one prevailing theme right now, it's that there's a growing list of cryptos making new highs.

It all started with Cardano, and we know how that turned out...

For us, it's very simple. The coins that are among the first to breakout are the strongest names and will continue to lead the asset class higher.

As we said in yesterday's note, if you're solely focused on Bitcoin wedged under resistance, you're not seeing the strength under the surface:

Just take a look at the Altcoins reasserting leadership versus Bitcoin at this very logical level.

Some stocks are going up in value.

Most stocks are not.

If there's been one theme that we keep seeing for most of the year, it's that.

Sure, some stocks are doing well. Most stocks aren't, as we discussed here.

You can really see it in the Nasdaq Advance-Decline line, as it sits at new 8-month lows:

From the desk of Steve Strazza @sstrazza

This is one of our favorite bottom-up scans: Follow The Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish… but NOT both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients. Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades. What remains is a list of stocks that large financial institutions are putting big money behind… and they’re doing so for one reason only: Because they think the stock is about to move in their direction and make them a pretty penny...

This is the video recording of the August 2021 Conference Call.

Key Takeaway: Positive earnings surprises and upward revisions have been setting records. Expectations are now elevated, and economic data is falling short. Macro disappointments, lack of rally participation and widespread optimism could make for a bumpy ride for stocks into year-end.

• With a handful of mega-caps driving index-level returns, we want to see sector-level leadership confirmed by similar sector strength on an equal-weight basis, as well as further down the capitalization scale.
• Financials are the top-ranked sector in our rankings on both a cap-weight and equal-weight basis. Strength fades among mid-cap and small-cap Financials. Real Estate remains a leader across the board from a weighting and size perspective, though it has slipped on a short-term basis.  

From the desk of Steve Strazza @Sstrazza

Our Top 10 report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

We often look to the Australian dollar as a barometer for global growth, but we can take that analysis one step further by checking in on the arguably more cyclical currency, the New Zealand dollar. It often gives us a nice leading signal on AUD/USD. With a good portion of the New Zealand economy being driven by agriculture, tourism, and international trade, the NZD acts as a nice microcosm for the global economy.

At notable turning points in these trends, we tend to see the New Zealand dollar provide a heads up before it’s reflected in the Australian dollar. Over the last few weeks, while the AUD has been making fresh lows, the NZD has been remarkably resilient, carving out higher lows.

Will this divergence resolve with AUD soon catching higher? The action from cyclicals would certainly support that outcome.

...

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the context of the big picture and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

• Our Macro universe performance was positive this week, as 74% of our list closed higher, with a median return of 0.52%.
• The biggest winner of the week was Dow Transports $DJT, which gained 2.93%.
• Meanwhile, the worst performer of the week was Lumber $LB, which fell by a massive -10.22%.
• Once again, several US Large-Cap indices finished the week at all-time highs.
• Momentum remains...

From the desk of Steve Strazza @Sstrazza

Welcome to our latest "Minor Leaguers" report.

We've already had some great trades come out of this small-cap-focused column since we launched it late last year and started rotating it with our flagship bottoms-up scan, "Under The Hood."

To make the cut for our Minor Leagues list, a company must have a market cap between $1 and $2B. There are also price and liquidity filters. Then, we simply sort by proximity to new highs in order to focus on the best players.

The goal is to catch the strongest names while they’re small and still have serious upside potential. If any of these stocks ever climbs the ranks to the big leagues, the returns could be huge. We’re looking at 5-10x moves just to break into large-cap land!

Let’s dive into this week’s report and see what’s happening in some of the hottest stocks in the Minor Leagues.

While the primary uptrend is still intact for small caps,...

The All Star Charts team is once again focused on financials, recently publishing a bullish piece on banks all around the world.

We've already got some exposure on the books in the financials sector, but with participation broadening, there are additional opportunities to participate.

And one opportunity in particular offers an opportunity to really leverage into a big win if we get it right.

This week we're looking at a long idea in the IT space.

Let's take a look at this name.

Cardano was the talk of the town last week.

Even though our initial target of 2.20 was hit within a matter of days, let's not underestimate the implications of this base:

With a breakout of this magnitude, this thing could be at $10 in no time.

It's no joke.

But it's not just Cardano showing incredible leadership right now.

If you're solely focused on Ethereum and Bitcoin, you're not seeing the whole picture.

We retired our "Five Bull Market Barometers" in mid-July last year to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

"Technician" vs "Chartist"

These are two terms that are often used interchangeably: Technician and Chartist. But many times it’s wrong to do so. You see, all chartists are technicians by definition, but not all technicians are chartists.

What is a chart?

For me, a chart is just a visual representation of the changes in equilibrium between supply and demand.

That's all it is.

We don't have to pretend it's something that it's not.

How the chartist interprets the data on the charts is where the skill and experience comes in. The chart alone won't do much for you, in the same way that a carpenter is way better at using his tools than I could ever be.

What is Technical Analysis?

These are the registration details for our live monthly conference call for Premium Members of All Star Charts.

This month’s Conference Call will be held on Monday August 16th at 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday night:

It's Saturday Morning Chartoons time. 

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

We came into last week wondering if we'd get follow through from Bank stocks.

I think we can all agree that we did. And not just in the U.S. but around the world.

Here are Regional Banks above those key 2018 highs:

There are few things as bullish as Regional Bank stocks acting well.

We went over all things Financials including new long positions in yesterday's note.

These look like uptrends to me:

How bad could things be if these European Banks are above key support?

...

You guys know that I use Fibonacci levels to help us identify targets and manage risk.

And you've all seen it work, with your own eyes, for many years. I have too, of course, as one of the gang here calculating these levels every day.

But I've never quite understood WHY it works. How come these numbers keep showing up all over Nature. Why do the prices of stocks and other assets keep respecting these levels?

When I get asked, I don't have an answer.

But if there's anyone I'm going to ask, it's gonna be Bart. So that's what I did.

And figured why not share this with all of you?

This was a lot of fun!